Digital media services business DG to acquire MediaMind

DG, a provider of digital media services to the advertising, entertainment and broadcast industries, is to acquire and MediaMind Technologies, a global provider of integrated digital advertising solutions, in an all-cash transaction.

MediaMind is headquartered in New York, it has 37 sales and representation offices covering 64 countries. In 2010, MediaMind delivered campaigns for 9,000 brand owners using approximately 3,800 media and creative agencies across 8,200 global web publishers in 64 countries.

DG has offered to purchase all of MediaMind’s outstanding shares for $22.00 per share in cash. The total transaction value is $517 million equity value or $414 million enterprise value, taking into account over $100 million in cash on MediaMind’s balance sheet. The board of directors of MediaMind are recommending that MediaMind shareholders tender their shares in the tender offer.

Upon closing, Gal Trifon, President and CEO of MediaMind, will serve as DG’s Chief Digital Officer, leading DG’s online advertising business. Additionally, Ofer Zadikario, MediaMind’s Chief Solutions Officer, will join DG in the same position.

Scott Ginsburg, Chairman and CEO of DG said, “With its new global reach and enhanced product offerings, DG will gain critical mass and will have the unique ability to provide a suite of cross-platform advertising management and distribution services.”

Neil Nguyen, President and COO of DG said, “We are extremely pleased about this transaction, which greatly accelerates our international and digital growth strategy.

For the twelve months ending March 31, 2011 the companies had in excess of $100 million in digital advertising revenue on a pro forma basis. With the MediaMind acquisition, DG expects to realise approximately $15 million in cost synergies identified to date, with clear opportunities for enhanced revenue growth. The transaction will be funded by a combination of available cash and fully committed debt financing from JPMorgan Chase & Co. and Bank of America Merrill Lynch. MediaMind shareholders holding approximately 8.2 million common shares outstanding and 1.8 million options, as well as certain officers and pre-IPO investors, have agreed to tender their shares in the offer.

Goldman Sachs & Co. and Bank of America Merrill Lynch acted as financial advisors and Latham & Watkins provided legal advice to DG. Qatalyst Partners acted as financial advisor and Davis, Polk & Wardwell LLP provided legal advice to MediaMind. The transaction is expected to close in the third quarter 2011.

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